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December 23, 2018

Dow, Dollar And Venture Updates

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December 22, 2018

Gold In Canadian Dollars

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Daniel’s Den

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December 21, 2018

7 @ 7:00

Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,255 and $1,263 so far today after yesterday’s surge triggered by further technical deterioration in the U.S. dollar which is poised for its biggest weekly drop in 10 months…as of 7:00 am Pacific, bullion is off $2 an ounce at $1,257...Silver has retreated 10 cents to $14.63…Copper, Nickel and Zinc are all off slightly at $2.69, $4.89 and $1.16, respectively, while Cobalt has inched up from $25.06 to $25.40Crude Oil continues its slide, down another 45 cents a barrel at $45.43, while the Dollar Index has bounced back modestly to 96.68one of the keys to an improving Venture and commodity sector will be a lower U.S. dollar…Wall Street has never been spooked by U.S. government shutdowns but the liberal mainstream media is hyperventilating today at the prospect Washington is headed for at least a partial shutdown unless President Trump and Congress cut a deal…Trump, determined to fulfill the campaign promises he was elected on, is standing firm in his demand for a border wall with Mexico…last night, House Republicans passed a bill to keep the government running through February 8 and put more than $5 billion toward the President’s wall…however, 60 votes are required for passage in the Senate, which will convene at noon EST today, where Republicans currently hold only a 51-49 majority…Trump has signalled that he’s prepared to close down the government “for a very long time” if Democrats in the Senate torpedo the legislation…funding for a range of federal agencies is set to expire at midnight tonight…

2. China will ratchet up support for its economy in 2019 by cutting taxes and keeping liquidity ample, the official Xinhua news agency said following an annual meeting of top leaders amid a trade dispute with the United States…the government has launched a raft of measures, including reductions in reserve requirements for banks, tax cuts and more infrastructure spending, to ward off a sharp deceleration in the world’s 2nd-largest economy…further policy steps are expected…“The external environment is complex and severe, and the economy is facing downward pressure,” Xinhua said, adding that the government would maintain its proactive fiscal policy and prudent monetary policy next year…China’s economic growth slowed to 6.5% in the 3rd quarter, the weakest pace since the global financial crisis…data last week showed surprising softness in November factory output and retail sales, indicating momentum is likely to be reduced further in the current quarter…the World Bank expects China growth to slow to 6.2% in 2019 from an expected 6.5% this year, as headwinds increase due to trade tensions with the United States…

3. The U.S. economy expanded at a solid 3.4% annual clip in the 3rd quarter, slightly slower than the previous estimate as consumer spending and exports were revised down a little bit…the Commerce Department says growth in the GDP, the economy’s total output of goods and services, was pegged at 3.4% after an earlier estimate of 3.5%…however, the still-strong performance followed a sizzling 4.2% advance in Q2 and a moderate 2.2% increase in Q1…the U.S. GDP performance for 2018 is easily on track to be the best in 13 years…maintaining that pace in 2019 won’t be easy…

4. Another lost Canadian opportunity, thanks to the climate change extremists who are in control of so much public policy in this country – Exxon Mobil Corp. has withdrawn its environmental assessment application for a $25 billion LNG export facility on the B.C. coast it proposed in 2015…B.C.’s NDP-Green coalition has made it clear that for the province to “live up to its Paris commitments” and “save the planet”, it won’t accept another LNG project beyond the 1 already slated to go ahead in Kitimat…yet another example of how professional career politicians in Canada, ideologically possessed by climate change, are destroying wealth and running the economy into the ground…have the likes of Trudeau, Horgan, Weaver and Notley ever had to meet a payroll in their lives?..

5. Fresh chaos in the Congo, which supplies nearly two-thirds of the world’s Cobalt:  A Presidential election in the “Democratic Republic” of the Congo (DRC), due to take place on Sunday, has been delayed until December 30th…the country’s electoral commission made the announcement, citing problems caused by a recent fire that destroyed 80% of the voting machines in the capital of Kinshasa…the delay to the election, already postponed repeatedly since 2016, will anger supporters of the DRC’s fractured opposition and dismay observers who hoped it would bring a measure of security to the country…it is also likely to raise tensions and could prompt significant protests…Corneille Nangaa, the head of the electoral commission, said officials have found enough voting machines for Kinshasa but had to get 5 million new ballots printed…Nangaa called on the country of some 40 million voters for calm…the DRC’s outgoing President, Joseph Kabila, refused to leave office at the end of his 2nd term in 2016 and only reluctantly agreed not to stand this time around…the country’s constitution limits Presidents to 2 consecutive terms…Kabila has been in power since 2001 and the election would be the DRC’s first democratic transition of power since independence from Belgium in 1960…opposition candidates have warned any delay would be unacceptable…“The CENI (election commission) President said there will be an election, rain or shine, on 23 December,” said Martin Fayulu, one of the 2 leading opposition candidates.  “We cannot accept a change of Mr. Nangaa’s position today”…local media reported CENI had cited 3 reasons for the delay:  the deaths of more than 100 people in ethnic violence in the northwest this week, an outbreak of Ebola in the east and a shortfall in the number of ballot papers it had been able to distribute…the DRC refused international assistance with the organization of the election…this was despite the massive logistical challenge of a poll in a violent, unstable country the size of western Europe that has no proper road or rail system and a population of about 80 million people…

6. The Dow is up 109 points as of 7:00 am Pacific as it tries to reverse a sharp pre-Christmas slide…very strong support exists between 23,000 and 22,000, the bull market uptrend line going back 10 years on the Dow’s long-term monthly chart…the TSX is down 9 points while the Venture, which has declined in 17 out of the last 21 sessions, is flat at 537…historically, the latest dates in December for Venture lows have been the 21st (2000), 20th (2016) and the 19th (2013 and 2001)…each of those December lows was followed by a major January surge…nearly 20 years of Venture trading history, current sentiment levels and multiple charts indicate a sharp reversal out of extreme oversold conditions is imminent…a slap on the wrist for West High Yield Resources (WHY, TSX-V) which has agreed to pay $200,000 and send its officers and directors for training…unbelievable…the “penalties” come as part of a settlement agreement that the Alberta Securities Commission released yesterday…the ASC cited West High Yield for a controversial news release that the company issued on October 5, 2017…the release stated that a previously unknown private entiry, Gryphon Enterprises LLC, had offered to acquire 3 properties that WHY owned in B.C. for the price of $750 million (U.S.)…news of the deal sent WHY to a high of $3.80, turning the stock into a quick 10-bagger…in its settlement with the ASC, the company admitted that it failed to disclose important information, such as the fact that the buyer did not have enough money to complete the deal…

7. British Columbia’s Green Monster has suffered a setback:  Voters have overwhelmingly rejected a referendum proposal, pushed by the NDP-Green coalition, to change the province’s electoral system to a form of proportional representation…this attempt at trying to “fix” something that isn’t broken should never have been made in the first place – B.C. voters had already twice rejected a change in the system in 2 previous referendums, but so-called “democrats” in the province like the Green’s Wacky Weaver actually have no respect for democracy…“This was a flawed process from the beginning as the NDP stacked the deck to satisfy the Green Party and remain in power.  This was never been about improving our democracy, it was always about power and control,” stated B.C. Liberal leader Andrew Wilkinson…“The rejection of Proportional Representation by the people of British Columbia demonstrates a clear desire to keep political power in the hands of voters”…the next test for the Green Monster will come early in the New Year when a by-election in the riding of Nanaimo, one that pits a local businessman against a career left-wing politician, could lead to the immediate fall of the coalition and a new election…

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December 20, 2018

7 @ 7:00

Visit the BMR comments section throughout the day for updates and helpful information!

1. Gold is responding well to the prospect of fewer U.S. rate hikes next year, as confirmed by the Fed yesterday…as of 7:00 am Pacific, bullion is up $18 an ounce at $1,260 as the greenback hits a new multi-week low…technical weakness in the Dollar Index could intensify going into January, giving not only Gold but the broader commodity sector and the Venture a much needed lift…not only has ETF buying of Gold picked up, but Swiss customs data shows Asian buying has improved as well, a according to Commerzbank.  “As the Swiss Federal Customs Administration reported this morning, Switzerland exported considerably more Gold again in November, especially to Asia,” the bank says.Gold exports to India nearly tripled month-on-month, while exports to China and Hong Kong soared by just shy of 60%”…Silver has jumped 22 cents to $14.78…Copper has added a penny to $2.74 while Nickel and Zinc are steady at $4.94 and $1.18, respectively…Crude Oil continues its slide, down $1.60 a barrel to $46.57…the Dollar Index has retreated half a point to 96.50…one of the keys to an improving Venture and commodity sector is a lower U.S. dollar…notably, the greenback’s technical posture continues to deteriorate after a double whammy this week, capped off by yesterday’s Fed decision to scale back rate hikes for 2019…the central bank may not have been as dovish as many had expected or hoped, but Fed Chairman Jerome Powell has probably saved some bullets for Q1 in the event he needs them…meanwhile, earlier this week, the EU and the Italian government brought a cease-fire to tensions over Italy’s budget, agreeing on a compromise which has removed some of the downside risk for the European economy next year…in economic data released this morning, the Philadelphia Fed manufacturing index in December fell to a reading of 9.4, from 12.9 in November, to reach the lowest level since August 2016…any reading above zero indicates improving conditions…however, the index peaked in May with a 34.4 reading, one of several business sentiment indicators that have receded from lofty levels…

2. Credit Suisse looks for Gold prices to rise in 2019, listing an average Gold price forecast of $1,275 an ounce, followed by a further jump in 2020…supportive influences include a U.S. dollar that should peak and reverse course, declining bond yields, potential for more turbulence in the stock market, exchange-traded-fund inflows, and continued central bank buying, Credit Suisse said…in an environment of rising Gold prices, Credit Suisse sees opportunities on the stock side, especially in companies with lower cost projects…the bank cited signs of a peak in the U.S. dollar which is bullish for Gold and the commodity sector in general…“This is underpinned by a growing view that the Fed will be challenged to further raise interest rates without slowing down the economy, as well as concerns twin deficits are deteriorating,” Credit Suisse said.  “Also, dollar bull markets typically don’t last more than 7 years and we are already in the 8th year of the current bull market”…further, real bond yields are potentially topping out, the bank continued…“A good sign for Gold investment demand is that fund flows for Gold ETFs have recently turned positive and we expect this trend to persist as other asset classes are volatile and appear less attractive”

3. More evidence of the stupidity of governments:  Zambia is pricing itself out of the global mining market with proposed hefty tax increases, the head of the local mining body said today, a further warning to investors rattled by the government’s efforts to squeeze more money from the sector (not the only place in the world where this is happening)…Africa’s #2 Copper producer plans to introduce new mining duties, replace value-added tax (VAT) with a sales tax and increase royalties, from January, to help bring down mounting public debt…mining accounts for more than 70% of Zambia’s foreign exchange earnings and companies operating in the southern African nation include First QuantumGlencore and Vedanta Resources“The proposed regime will result in over 58% of Zambia’s Copper producers being in a loss-making position at current prices,” stated Zambia’s Chamber of Mines’ President Goodwell Mateyo in a news conference today…the government estimates that mining tax revenues will rise to $1.3 billion next year following the tax increases, from $800 million this year…the chamber, however, expects revenues would rise to only around $840 million

4. The Trudeau government should be getting increasingly worried about the backlash that’s building in Alberta and elsewhere in the country over its disastrous National Energy Program…unemployed Oil workers have been staging weekly rallies across Alberta, and calls for a renegotiation of the province’s role within confederation have become more widespread and strident…yesterday, a pro-pipeline convoy with thousands of truckers blared its way through an Alberta town with a stern message for Trudeau:  “We don’t need handouts”2 days after Trudeau pushed his famous “optics” button again and announced an “aid” package for the province’s struggling energy sector, a weak attempt at showing he actually cares (he doesn’t, in fact he’s deliberately trying to phase out the Oil sands), Oil and gas workers demanded ACTION on the halted Trans Mountain pipeline – not loans…the quote of the week goes to Conservative leader Andrew Scheer:  “Give a province $1.6 billion and you might feed them for a couple of weeks, but let them build a pipeline to get our energy to market and you can feed them for a generation”…if Trudeau, who of course is all-in on getting pot to market, really wanted to help the Alberta Oil sector and the broader Canadian resource industry, he’d revamp or rescind controversial Bill C-69 which was designed to ensure that another pipeline will never get built in this country – all investors have to read this crazy proposed legislation and realize how dangerous it is…Canadians should not be surprised at Trudeau’s stance toward the Oil sector and Western Canada – he learned a lot from his father whose economic policies also wreaked havoc on the country…

5.  Sign of the times:  Jujuy province in Argentina has proven to be not so friendly toward the mining sector, but it’s really embracing cannabis…Aphria (APHA, TSX) announced this morning that its subsidiary ABP SA has signed a Letter of Intent with the Argentine state-owned Cannabis Avatara Sociedad del Estado (CANNAVA) to enter into a co-operation agreement regarding the cultivation of cannabis that will expand the company’s strategic Argentine operations into the province of Jujuy…under the terms of the agreement, ABP is to establish a facility for the cultivation and processing of cannabis, as well as for the manufacturing of cannabis derivative products, including, but not limited to, cannabis oil…the company understands through CANNAVA, Jujuy will produce curative oils and medicines using cannabis sativa…Aphria is strategically positioned to be among the first companies to produce locally, and eventually commercialize, its products in Argentina at much lower cost,” said Gabriel Meneses, Vice-President, Latin America and Caribbean, at Aphria.  “We are proud of the relationship we have built with the Province of Jujuy after months of discussions and planning, and thankful for their support”…as Argentine legislation evolves, Aphria says it’ll be positioned to scale production in Jujuy, including making necessary investments to expand its footprint there and provide access to high-quality, low-cost medicinal cannabis…

6. The Dow is off another 119 points at 23,204 as of 7:00 am Pacific…very strong support exists between 23,000 and 22,000, the bull market uptrend line going back 10 years on the Dow’s long-term monthly chart…the TSX is up 48 points, thanks to strength in Gold stocks…the TSX Gold Index has rebounded 8 points to 180 after providing investors with an ideal buying opportunity yesterday…Kirkland Lake Gold (KL, TSX), our favorite producer, is up 94 cents at $33.40New Gold (NGD, TSX), a turnaround story for 2019, is up 4 cents at $1.10 while Pretium Resources (PVG, TSX) has added 35 cents to $10.98…the Venture is flat at 542…the Index has fallen in 16 out of the last 20 sessions, losing 10% of its value during that time…nearly 20 years of Venture trading history, current sentiment levels and multiple charts indicate a sharp reversal out of extreme oversold conditions is imminent…

7. Tilray (TLRY, NASDAQ) is up 10% in early trading on news after the close yesterday that it has entered into a $100 million joint venture with beer brewer AB InBev to study cannabis-based beverages…the partnership is limited to Canada, and the companies will make decisions about commercializing the products in the future…the joint venture, in which both companies will invest $50 million each, will study non-alcoholic beverages containing THC, the psychoactive chemical compound in marijuana, as well as CBD, the non-active chemical…brewers have started dabbling in the cannabis space as interest grows and regulations ease…Constellation Brands, which sells Corona and Modelo in the U.S., has invested $4 billion in Canopy Growth (WEED, TSX; CGC, NYSE)…meanwhile, Heineken’s Lagunitas brand introduced a cannabis-infused drink in California this summer…

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December 19, 2018

BMR Evening Alert!

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7 @ 7:00

Check back throughout the day for updates and helpful information!

1. Gold continues to firm, trading between $1,246 and $1,259 so far todayas of 7:00 am Pacific, bullion is up $7 an ounce at $1,256 ahead of a Fed statement at 11:00 am PacificGold holdings in exchange-traded funds continue to rise, according to commodities brokerage SP Angel“Global (ETF) assets expanded more than 10 tonnes to the highest since July, with investors seeking havens as equities flounder, and expectations of hikes in 2019 recede.  Gold snapped a 6-month losing run in October, held its ground in November, and then gained this month as investors position themselves for 2019 by adding to worldwide holdings in ETFs”…meanwhile, holdings in the SPDR Gold Trust – the world’s largest Gold ETF – jumped 1.1% yesterday to 771.79 tonnes, the highest since August 20Silver has jumped 16 cents to $14.76…Copper has added 2 pennies to $2.73 while Nickel and Zinc are both up slightly at $4.94 and $1.18, respectively…Crude Oil, after a steep plunge yesterday, has rebounded 91 cents to $47.15the U.S. Dollar Index has retreated one-tenth of a point to 96.88…one of the keys to an improving Venture and commodity sector is a lower U.S. dollar, and at the moment the greenback is on the cusp of a potential technical breakdown entering January…today’s Fed language will be critical..

2. The Federal Reserve is widely expected to raise interest rates by a quarter point later today (11:00 am Pacific, followed by a Jerome Powell news conference half an hour later)…more importantly, however, the Fed is likely to signal that it won’t be pushing rates higher as much as it had previously forecast…this should help soothe volatile financial markets but the Fed has a tough task in explaining its actions in a way that will not sound too alarmist about the economy or too unconcerned about deteriorating financial conditions…the central bank is seen as likely to take the Fed funds rate range to 2.25 to 2.50% (the highest in a decade but still low by historical standards) while removing language in its post-meeting statement that says it will continue with “gradual” rate increases…the Fed has said it expected to raise interest rates 3 more times next year, but many economists now believe the Fed will have a tough time pushing through even 1 rate hike in 2019…a more dovish Fed should put downward pressure on the dollar which, in turn, should help the commodity sector as 2019 unfolds…

3. Don’t be fooled:  The Trudeau government, which seems to take voters as fools, did what it does best yesterday – it played a very shameful game of “optics” as it unveiled $1.6 billion in new loans and financial support for beleaguered Canadian Oil and gas companies…Ottawa said it’s setting aside $1 billion in financial support from Export Development Canada for companies to make capital investments and buy new technology, another $500 million in new loans over the next 3 years from the Business Development Bank of Canada, $100 million for energy and economic diversification projects, and $50 million for an unnamed Oil and gas project…“This is absolutely not what is needed,” stated Whitecap Resources‘ (WCP, TSX) CEO Grant Fagerheim.  “We don’t need welfare; we need policies that get our products to markets – simple”Albertans are justifiably angry right now and they aren’t interested in handouts – they want real action in terms of building new pipeline capacity, which Trudeau has no intention of doing, while they also want the Trudeau government to make major changes to Bill-69 which has already been passed by the Liberal majority in the House of Commons and is now before the Senate…Bill C-69, if you haven’t read it, is the final nail in the coffin for any future pipeline projects in Canada…it’s an anti-fossil fuel piece of legislation drafted by the same group of left wing climate change extremists who inflicted enormous damage on Ontario during the McGuinty-Wynne era, and it’ll also impact the broader Canadian resource sector…unfortunately, we have a federal government that is unquestionably hostile toward the resource industry, and that partly explains the Venture’s woes this year…Pierre Trudeau’s National Energy Program wreaked havoc on Alberta and the rest of Western Canada, creating new regional tensions in the process…Justin Trudeau’s National Energy Program 2.0 is even more dangerous which is why the silent majority in Canada need to stand up and fight back….the cost to the national economy is estimated at a minimum of $50 million each and every day…Canada is run by a bunch of politicians – very few with any substantive business experience – who are wealth destroyers, not wealth creators…

4. The Congo, which supplies more than 60% of the world’s Cobalt, will vote on Sunday in a long-delayed election that is fraught with risk…President Joseph Kabila is due to step down after 18 years in the office he inherited from his assassinated father, and 2 years after his constitutional mandate officially expired…violence last week in which security forces killed at least 7 opposition supporters and a fire that destroyed thousands of voting machines were timely reminders of how quickly things can turn sour…the disputed results of prior elections in 2006 and 2011 sparked violent protests, and there is every indication that losing candidates will again cry foul…Congo is not only the world’s biggest producer of Cobalt but it’s also Africa’s top Copper miner and a significant producer of Gold…that makes the election of keen interest to investors and mining companies such as Glencore, Randgold and China Molybdenum, all of which are battling the government over a new mining code passed this year that hiked taxes and royalties…Kabila’s preferred candidate, Emmanuel Ramazani Shadary, would likely continue the recent hard line with foreign investors…his main challengers have said little on the subject…corruption in the Congo has drawn the attention of the U.S. Justice Department which is carrying out investigations, while the Ontario Securities Commission yesterday sanctioned Glencore subsidiary Katanga (KAT, TSX), imposing more than $30 million in fines and forcing CEO Johnny Blizzard to step aside…meanwhile, Congo’s government has started an audit into how radioactive Cobalt produced by Katanga left the country before an alarm was raised…

5.  It’s official: This is an all-time record year for U.S. corporate stock buybacks (helps make earnings look better and props up stock prices but takes away from infrastructure and R&D investments for future growth)…announced buybacks for 2018 are now at a whopping $1.1 trillion, and companies are using their authorizations…about $800 billion of stock has already been bought back, leaving about $300 billion yet to be purchased…we’ve seen buyback announcements recently from Lowe’s, Pfizer and Facebook, but in the last few days, as stocks moved to new lows, companies have picked up the pace of activity…

6. The Dow has shot up 172 points as of 7:00 am Pacific…the TSX, meanwhile is 95 points higher as it climbs back above the key 14,500 level…the Venture is up 3 points at 546…the Index may have put in its December low yesterday at 542.55Venture history, current sentiment levels and multiple charts indicate a sharp reversal out of very oversold conditions is imminent…Westhaven Ventures (WHN, TSX-V) announced this morning that it has completed another 2,183 m of diamond drilling in 5 holes at its Shovelnose Property near Merritt…the company says multiple occurrences of visible Gold were encountered in 2 of the holes, SN18-18 and SN18-21…a separate vein zone was also intersected in 4 of the holes, situated approximately 150 m to 200 m down section from the rich vein zone that was cut in holes SN18-14 and SN18-15…Gareth Thomas, Westhaven President & CEO, commented:  “This newly discovered 2nd vein zone has the potential to significantly increase the size and scale of the South Zone Gold discovery.  We are planning to initiate a fully financed drill program in early 2019, not only to follow-up on recent drilling success in the South Zone but to drill test targets generated from recently completed magnetic surveys (geophysics initiatives)”

7. Tilray (TLRY, NASDAQ) shares jumped again this morning after the B.C.-based company took another step to strengthen its medical marijuana business outside Canada through a new collaboration with Novartis pharmaceutical group’s Sandoz AGTilray is a global company, and we’re thrilled to build upon the success and momentum from our existing agreement with Sandoz Canada by taking our partnership global,” Tilray CEO Brendan Kennedy stated yesterday…under its original agreement, announced last January after several months of talks, the companies began shipping non-combustible medical products with the Tilray and Sandoz/Novartis brands to customers in Canada beginning in June…the new global arrangement allows Tilray to use the Sandoz supply chain, sales force and global distribution network to distribute Tilray medical cannabis products, Kennedy said…the number of countries that have legalized medical cannabis has more than doubled to 35 from 15 in 2010, when Kennedy got into the business…“It’s very clear to me how we go from 35, to 40, to 50, 60 countries globally…and this agreement enables us to ensure that our products get into the hands of more patients around the world,” he added…

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December 18, 2018

BMR Evening Alert!

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